It helps to have a car company that knows what it is doing and what the consumer wants. What a refreshing change!
As Auto Prosperity Shifts South, Two Towns Offer a Study in Contrasts
The local economy was thriving because of the Big Three automakers, which operated humming factories near Livonia and employed thousands of managers who commuted about 20 miles to the auto companies' headquarters downtown.
Three hundred miles to the south, drivers back then on Interstate 75 could zip right by Georgetown, Ky., and barely notice it, with its tiny downtown, small college, quaint Victorian homes, and a spring that locals claimed was "the birthplace of bourbon." The local hangout, Fava's, was about the only place for a decent meal.
Now, two decades later, the two cities have seemingly switched places economically.
Livonia is stumbling, as Detroit's automakers close factories and eliminate blue- and white-collar jobs. Just last week, Ford Motor announced that
30,000 workers had opted for deals worth up to $140,00 to leave. In all, with similar offers at General Motors, about 70,000 auto workers, or one-third of those in American plants, have decided this year to leave.Georgetown, however, is booming because of Toyota, which has invested more than $5 billion in a sprawling manufacturing complex, leading to the construction of new schools, hotels and dozens of smaller factories run by suppliers to Toyota.
Their changing fortunes offer more than a tale of two auto cities. They provide a close-up look at the impact of a broader economic shift of the nation's auto industry from north to south, as Detroit falters and their surging Asian competitors invest in Southern states.
Over the last two decades, for example, the number of automotive-related manufacturing jobs in Michigan has fallen 34 percent, according to Economy.com. By contrast, the number of automotive jobs in Kentucky rose 152 percent over that period.
"There is a definite shift away from the strongholds of American manufacturing to places that were never manufacturing centers," said Gary N. Chaison, a professor of industrial relations at Clark University in Worcester, Mass. "These international companies want a fresh start - not in a town like Detroit, with a long history in the auto industry, but in an empty field where people appreciate them."
The shift carries with it not just thousands of well-paying jobs and billions of investment dollars, but also a sense of prosperity gained or lost.
In Georgetown, it means managing a rapidly growing population, being dependent on a single employer, and hoping that Toyota's march to the top of the global automobile industry continues.
Fewer Jobs and Services
For Livonia, the shift means acknowledging that the industry that once provided its region the equivalent of civil service jobs can no longer be relied upon, forcing the city to shrink the services it can offer residents.
Despite signs at Livonia's border boasting of "55 years of progress," Mayor Jack Engebretson recently had to lay off 90 people and cut $5 million from the city's budget. Seven elementary schools closed this fall because of falling enrollment. Wonderland, among Livonia's original shopping centers, was torn down over the summer.
In once-prestigious neighborhoods like Old Rosedale Gardens, even price cuts do not help owners sell their historic properties. Detroit's auto companies have also pulled back on moving employees around the world, meaning there is less of a reliable churn in the local housing market.
"Three years ago we had just as many people transferring in as out," said Jeff Glover, a local Realtor. "Now it's about three transferring out to one transferring in."
Herb Miller, 80, moved to Livonia from Detroit in 1961 when he transferred to a job at the newly built G.M. bumper plant in town. He still loves Livonia, but rising crime concerns him.
"It seems like about the time that everybody was writing about what a great place this is to live, things started to change," said Mr. Miller, recalling several murders that shook the community several years ago.
Although retailers have been clamoring to build on the west side of Livonia to serve wealthier exurbs, his section of town has been losing businesses. The closest shopping center, the 42-year-old Livonia Mall, is likely to be demolished within a few years. "They've got to do something about that - that's a dead mall," Mr. Miller said.
Livonia's population, which exploded from 18,000 in 1950 to peak at almost
120,000 in the 1970s, now appears to have fallen below 100,000, according to an estimate by the Southeastern Michigan Council of Governments.Today, Plymouth Road, the city's longtime business corridor, is more of a reminder of the city's past success than a shopping destination. The aging owner of Fonte D'Amore closed his Italian landmark restaurant this summer. Livonia's annual holiday parade was discontinued three years ago because of budget constraints. Nearly all of its strip malls have vacancies.
There is no mystery why Plymouth Road is hurting. Michigan has the highest unemployment rate in the country, and both General Motors and the Ford Motor Company are eliminating tens of thousands of jobs through buyout and early retirement offers.
Workers at all three Detroit automakers live in Livonia, but it considers itself primarily a Ford town. Jobs at Ford originally helped attract residents who fled Detroit after the 1967 riots, and the company employs more than 4,000 people at its transmission plant on the west side of town.
For now, those jobs appear to be safe, and in fact, Ford recently filed paperwork to invest about $45 million to update the factory. But with Ford trying for its third turnaround in five years, that commitment could change.
"There are a lot of Livonia residents that are going to face challenges as Ford goes through its reinvention of itself," Mr. Engebretson said. "We're holding our breath."
Smaller manufacturers in Livonia have been hit hard. The city has one of the Midwest's largest industrial corridors, a six-mile strip of factories and warehouses along Interstate 96. In 1995, more than 95 percent of Livonia's
40 million square feet of industrial space was occupied. The vacancy rate has more than doubled since then.Officials recently started marketing the corridor with the slogan "Industry's Highway" in the hopes of filling some empty buildings, ideally with companies that are not in the auto business.
"We don't want to be tied in any significant way to any one industry because it's just not a healthy thing to do," Mr. Engebretson said.
As for Georgetown, it had no industry to speak of and only one McDonald's when Gov. Martha Layne Collins made her first trip to Japan in the mid-1980s, hoping to lure a foreign auto company. She had watched as Kentucky's northern neighbor, Ohio, landed two Honda plants and a big technology center, while to the south, Tennessee had lured both Nissan and won the Saturn plant.
An Enthusiastic Reception
She said she believed that Georgetown was an ideal location, set near the intersection of Interstate 75 which runs north to south, and Interstate 64, which travels east to west. It is also just 15 minutes from Lexington, home to the University of Kentucky and a small airport.
When Toyota began narrowing its options, the state Legislature approved a $147 million incentive package to help land the factory - 30 times what Ohio spent to land Honda, although half what Alabama would eventually spend to lure Mercedes-Benz.
Georgetown residents were excited by the possibilities. "I know what it was like here before Toyota came," said George Lusby, the Scott County executive judge, the equivalent of a county administrator. "Back then, the stores were half empty."
Still, there was criticism of the governor for seeking foreign investment, and fears among some residents that a foreign company might not be loyal to the state. "Toyota is now accepted as part of the fabric of Kentucky, but it wasn't 20 years ago," said Dennis Cuneo, who recently retired as an executive in Toyota's North American manufacturing operations and is now a consultant to the automaker.
Given that Toyota has invested more than $5 billion to date in Georgetown, "I'd do it again tomorrow," Ms. Collins said.
Among the original workers to land a job at the plant was Cheryl Jones, a manager at a local supermarket with no factory experience. Twenty years later, she is now vice president for manufacturing at Georgetown, and recently traveled to Mexico to help open a new Toyota plant there.
"I've been all over the world now because of Toyota and the plants that we have," Ms. Jones said.
Workers in Georgetown sometimes find themselves stuck in the miniature rush hour that occurs in late afternoon, when pickup trucks and Camrys pour out of the factory and turn onto Cherry Blossom Boulevard.
The local population has nearly doubled in 20 years, to about 20,000. There are at least a dozen new subdivisions, and some houses have been built directly across from the Toyota plant.
So have dozens of smaller factories, creating something akin to the industrial corridor in Livonia. Prospective investors are constantly on the phone to Jack Conner, executive director of the Georgetown/Scott County Chamber of Commerce, looking for vacant land where they can build new plants.
The buildings are not all commercial. Just this decade, Georgetown has built a recreation center, complete with an outdoor skateboard park; new elementary, middle and high schools; and is expanding a Japanese garden. The Cincinnati Bengals now hold summer practice in Toyota Stadium, also used by Georgetown College.
Downtown Georgetown bustles with antique stores, an espresso bar in the old bank building and Fava's, which recently got a face-lift and now sells T-shirts and postcards, along with its meringue pies. The city now has three McDonald's and a Wal-Mart Supercenter.
An Uneasy Feeling
Yet, some worry that the prosperity will not last. Employment at the plant leveled off about two years ago, at about 7,800 workers, and there is little likelihood Toyota will hire many more, except to replace those who are beginning to retire from the factory.
Plant managers, however, are constantly lobbying the company for new work, and landing it. This summer, Georgetown began building a hybrid version of the Camry sedan, replacing production previously done in Japan. And there is a large swath of empty space inside the factory that could be used to add another model to the plant, perhaps a crossover vehicle or a Lexus luxury model.
"There will never be another Toyota," Ms. Collins said. "There are other companies, there are other manufacturers, but there is only one Toyota."
Back in Livonia, Mayor Engebretson remains optimistic that the city will regain a sense of prosperity. He readily acknowledged the challenges facing the city, which has fared better than crumbling factory towns like Flint, a national symbol of the auto industry's decline.
"All in all, I think Livonia is still a very vibrant community, and I am convinced unequivocally that our brightest days still lie ahead," he said. "People have fallen on hard times, but we're working awfully hard to keep the status that has been enjoyed by this community for many years."
-- "Your best, last and only line of defense-a cohort of Roman Heavy Infantry"